Two companies, CTR (absorbed by Riverstone) and ICD concluded several reinsurance treaties including arbitration clauses. ICD company has been wound up and the liquidator pursued arbitration proceedings against Riverstone and other reinsurers. The arbitral tribunal ordered Riverstone to pay a sum of money to ICD and found that as Riverstone did not report its debt to the company, it could no more request a compensation of the debts.
Accusing its lawyer of failure in his duty to advise which resulted a loss of opportunity to compromise and avoid the arbitral tribunal’s sanction, Riverstone sued him. The high court ordered the lawyer and his law firm to pay damages because of the erroneous and incorrect calculation of ICD’s prejudice and dismissed Riverstone’s other claims. The latter appealed. As the situation is particularly complex, the judges considered that the failure in his duty to advise was not proved by Rivertone. Nonetheless, the law firm was ordered to pay damages to Riverstone due to the damages resulting from the loss of opportunity to not be able to reduce the amount of the sums that Riverstone had been ordered to pay as it had not been mentioned before the arbitral tribunal that caps, limits and franchises provided for in the treaties were applicable.